Form 1120-X: How to Amend a Corporate Tax Return

Form 1120-X, the Amended U.S. Corporation Income Tax Return, is used to correct a previously filed Form 1120. Filing this form allows a business to formally report changes to its income, deductions, or tax credits for a specific tax year.

The form is the official channel to communicate these corrections to the Internal Revenue Service (IRS). It is not for filing an initial return or for a quick refund of overpaid estimated tax. Its use is strictly limited to modifying a return that has already been processed by the IRS.

When to File Form 1120-X

A corporation should file Form 1120-X after discovering an error on a previously filed return. Common reasons include mathematical mistakes, failure to claim an available tax deduction or credit, or the need to change an accounting method. For instance, a business might realize it did not deduct all of its eligible business expenses and can file an amendment to claim these deductions and potentially receive a refund.

There are time limits for filing an amended return. A corporation must file Form 1120-X within three years from the date it filed its original return or within two years from the date it paid the tax, whichever is later. A return filed before the due date is considered filed on the due date for this purpose. For claims related to bad debts or worthless securities, the window is extended to seven years.

Required Information and Form Completion

Before beginning Form 1120-X, a corporation must gather a copy of the original Form 1120 for the year being amended. Additionally, any financial statements, schedules, or other forms that support the changes are necessary. This could include revised profit and loss statements, balance sheets, or specific forms related to the deductions or credits being adjusted.

Part I is structured into three main columns to show the adjustments. Column (a), “As originally reported or as previously adjusted,” requires the figures from the original tax return. Column (b), “Net change,” is where the filer enters the increase or decrease for each line item being changed. Column (c), “Correct amount,” is the sum of columns (a) and (b), reflecting the corrected figures as they should have been on the original return.

This structure details every adjustment, from gross receipts to the final tax calculation. For example, if a corporation is amending its return to claim an additional $10,000 in deductions, it would enter the original total deduction amount in column (a), “$10,000” in column (b), and the new, higher total deduction amount in column (c).

Part II, “Explanation of Changes,” requires a detailed, narrative explanation for each change reported in Part I. The filer must explain why a number was wrong and provide the specific reason for the correction. For each change, the explanation should reference the line number from Part I, describe the adjustment, and detail the underlying cause, such as a calculation error or an overlooked deduction.

The Filing Process and Next Steps

Corporations can file Form 1120-X electronically, and e-filing is required for corporations that file 10 or more returns of any type during the calendar year. If mailing a paper form, it can be sent to the IRS service center where the corporation filed its original return. Attach copies of any forms or schedules that have been changed or that support the amendments, such as attaching Form 3800 if amending to claim a general business credit.

Processing times for an amended return can take several months as the IRS reviews the changes and explanations. Unlike individual filers, corporations cannot use the “Where’s My Amended Return?” tool to check the status of Form 1120-X.

If the amendment results in an overpayment of tax, the IRS will issue a refund. If the changes result in additional tax owed, the corporation will receive a notice detailing the amount due, including any applicable interest and penalties. The IRS may also contact the corporation to request more information before finalizing the return.